Try...Try Again! Mississippi!
Failed online gambling bill will likely be back next year (Salter)
Published: Monday, May 14, 2012, 5:12 AM
By Mississippi Press Editorial Board The Mississippi Press
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Sid Salter, columnist for The Mississippi Press and journalist-in-residence at Mississippi State University.
When it comes to so-called "sin" taxes, Mississippi has a long track record of contradictory political and public policy behavior.
Despite Mississippi's status as the "gold buckle of the Bible Belt" and a politically active evangelical clergy with clout at the state Capitol, state taxpayers enjoy fruits of the "wages of sin" to the tune of some $536 million annually in various taxes collected on gambling, drinking and smoking.
The sale of "sin tax" items also generates additional sales taxes that exceed another $100 million.
Gaming in the last fiscal year generated $277.8 million in taxes -- $130.9 million to county and municipal governments and $146.9 million to the state.
Overall, gaming provided 3 percent of general fund revenues. Tobacco taxes generated $158 million, or 4 percent of the general fund. Alcoholic beverage taxes generated $71 million, but $8.6 million went to county and municipal governments, leaving $63 million, or 1 percent, of general fund revenues for the state.
Mississippi voters believe -- with varying degrees of factual and historical support for those beliefs -- that they have been promised in the past that legalizing and taxing alcohol sales, gaming and other "sins" would provide support for public education and other noble pursuits.
They also believe that those "promises" have been proven to be either false or grossly overstated.
The other lessons from the ghosts of sin taxes past are that sin tax efforts produce strange political bedfellows. Want to change a local option liquor law? Then prepare to fight both the local churches and the local bootleggers.
Want to change Mississippi gaming laws? Then prepare to fight both the religious community and the entrenched gaming industry.
Since the inception of legal casino gaming in Mississippi in the 1990s, efforts to enact a state lottery or other major changes have met with opposition from the churches and from the big casino companies.
So when Democratic State Rep. Bobby Moak introduced House Bill 1373 during the 2012 session, religious critics of any expansion of legal gaming of any kind in Mississippi reacted.
But this time, many of the big casino companies supported Moak's attempt.
Moak's "Mississippi Lawful Internet Gaming Act" was a reaction to a 2011 U.S. Justice Department ruling that held that the Interstate Wire Act of 1961 -- a federal law that has complicated efforts to legalize online gaming -- was being interpreted as only outlawing sports betting.
In the past, the federal Wire Act was interpreted as outlawing all forms of gambling across state lines.
Moak argued that the legislation was necessary to allow Mississippi's existing gaming industry to have more control of its own destiny and to allow the state to regulate what will already be taking place online -- and to tax it.
The bill -- which died in committee after being double-referred to Gaming and Ways and Means -- included a measure to allow the state's existing gaming licensees to offer online games of chance that are regulated and taxed by the state, but on different terms than in the bricks-and-mortar casinos.
Nevada and New Jersey are already changing laws to address new online gaming competition. Since the Justice Department ruling, six states (California, Hawaii, Iowa, Illinois, Mississippi and New Jersey) have introduced legislation authorizing forms of online gaming in their states.
Utah has passed legislation specifically prohibiting Internet gaming, and Michigan has pending legislation prohibiting online lottery sales. Maine has altered its gaming statute in response to the Department of Justice ruling. Regardless the tension between the strange political bedfellows made by "sin" taxes, Mississippi lawmakers haven't heard the last of the online gaming issue. The state's existing 30 commercial casinos had gross gaming revenue of $2.39 billion in 2011.
The state's 2011 gross gaming revenue declined to the lowest level since 1998 -- a sign that perhaps online gaming competition regulation is an issue that should get a legislative second look.
Sid Salter is journalist-in-residence at Mississippi State University and a syndicated columnist. His email address is sidsalter@sidsalter.com.
